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The Actuary The magazine of the Institute & Faculty of Actuaries

Let's take devolution to the limit


Icki Iqbal suggests an innovative, more individualised, way of funding the NHS and social care

Let's take devolution to the limit

The NHS and social care system in the UK, once the envy of other countries, is broken and needs an overhaul. Instead, the government offers a series of ‘quick fixes’. However, these are not quick and they don’t fix.

There are problems on the supply side. Medics and administrators are at odds with each other, with the unions in the middle.

There are problems on the demand side, too. The public seem to regard a ‘free at the point of delivery’ service as a birthright, regardless of cost. Nothing pleases them, because they always want more. Improvement requires capital, which is in short supply. 

I have spent several months researching this subject and have come up with a paper suggesting a transformation of the NHS. We will achieve this by harnessing two characteristics of modern people:

  1. They would be less demanding of the NHS and social services if they were spending their own money rather than getting it free. Somehow, the fact that they do pay for it through taxation is lost on them; and

  2. Their desire to take control of their own affairs. First, we had devolution for Scotland and Wales, then for the cities, then Brexit. Why not take this trend to its limit and devolve spending on health to the individual? No government to ‘meddle’ – you do it yourself.


So, I propose a new scheme to meet the needs of the 21st-century British people. It would:

  • Be publicly owned
  • Provide universal coverage
  • Provide health service free at the point of delivery
  • Be funded out of taxation.


The innovation is that the control of spending would pass from the NHS and the GPs to the individual. Each individual would be given an annual limit – a line of credit rather than cash – called the ‘allowance’, to spend on health and welfare. By giving each person direct responsibility for managing this allowance, and allowing any unused amounts to augment their pension, the scheme would both temper demands for more service and reduce costs. People are more careful with their own money than with the government’s.

Let me give a brief outline:

  • The new scheme would come into effect in 2025. Everyone over 18 would be given an allowance – a line of credit, not cash.
  • The annual allowance would be set at local authority level. It would be age-specific, with the weighted average ranging from £1,000 for those under 50 to £20,000 for those over 90.
  • Although the allowance sets the limit on the person’s health spending in a year, there would be two exceptions: if there are genuine medical reasons they could go overdrawn up to a maximum; and for certain specified conditions or surgeries that are rare and expensive, they could go over the limit.
  • Anyone entering long-term residential care after their 70th birthday would receive a non-means-tested, tax-free, annual income of £25,000 while in care.

  • Special considerations would apply to initial entrants.


The changes are broadly self-financing, and in the long run would make the NHS less capital-hungry.

A role for the profession

The problem will not go away if you ignore it. We are living beyond our means. The only things we are bequeathing our children are debt and dementia. On current trends it is predicted that, by 2051, one in seven of everyone over 75 will suffer from dementia.

It would be nice if the actuarial profession took an active role in this. After all, it chimes with many themes that the Council champions, including communications, inter-generational transfers and wider fields.

A paper by Icki Iqbal, ‘What do people want? A long life or a healthy life?’ is available on request. 

Email editor@theactuary.com

Icki Iqbal is a retired actuary